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What is MTD for IT and How Will It Affect Me?

What Is MTD for IT, and How Will It Affect Self-Employed Individuals and Landlords?

Making Tax Digital for Income Tax (MTD for IT) is a major change in how self-employed people and landlords in the UK manage and report their taxes. It is part of the government’s plan to modernise the tax system, making it more efficient and less prone to mistakes.

If you are self-employed, this change will affect how you record your income and submit your tax returns. Here is what MTD for IT means, how it could impact you, and what steps you should take to be ready.

What Is MTD for IT?

MTD for IT stands for Making Tax Digital for Income Tax. It extends the government’s existing Making Tax Digital (MTD) plan, which already applies to VAT. MTD for IT will change how you report income tax if you are:

Self-employed
A landlord with rental income

Under MTD for IT, you will need to:

Keep digital records of your income and expenses
Submit quarterly updates to HMRC using MTD-compatible software
File an End of Period Statement (EOPS) and Final Declaration each year to confirm your income and tax due

Who Does MTD for IT Apply To?

MTD for IT will apply to:

Self-employed people and landlords with annual business or property income over £50,000 from April 2026
Those with income between £30,000 and £50,000 from April 2027
Those with income over £20,000 from April 2028

HMRC is still reviewing how MTD for IT will work for people earning below £20,000, so it is worth staying up to date.

How Will MTD for IT Affect You?

1. Digital Record-Keeping

If you still use paper records or spreadsheets, you will need to switch to software that keeps your records digitally.

2. Quarterly Reporting

Instead of one tax return a year, you will send four updates to HMRC during the year. These updates show your income and expenses as you go.

3. End of Year Submissions

You will still confirm your accounts at the end of the year, but the process should be simpler with the right software.

4. More Transparency

With regular updates, you will have a clearer view of what you owe throughout the year, so there should be fewer surprises.

What Do You Need to Do to Prepare?

1. Check If MTD for IT Applies to You

Look at your yearly income to see when the rules will apply.

2. Choose MTD-Compatible Software

Tools like QuickBooks, Xero and FreeAgent are all MTD-compatible and will help you keep records and submit updates.

3. Get Organised

Make sure your income and expenses are up to date and accurate. If you rely on paper receipts, now is the time to go digital.

4. Learn the Basics

Get to know how to send quarterly updates, your End of Period Statement and the Final Declaration.

5. Get Professional Support

The rules can feel complex at first. A good accountant can help you set up your software, stay compliant and avoid penalties.

How We Can Help

At Pomroy Associates, we understand how MTD for IT can feel like another task on your list. We want to make the change as smooth as possible.

Here is how we help:

Clear Advice — We explain what MTD for IT means for you and how to stay compliant
Software Setup — We help you choose the right software, set it up and show you how to use it
Quarterly Support — We help prepare and submit your quarterly updates so they are accurate and on time
Year-End Help — We handle your End of Period Statement and Final Declaration, giving you peace of mind
Ongoing Support — We are always here to answer questions and guide you through any changes